Drilon Worried About Underspending Dragging Down GDP Growth Off Target

(PNA) — Senate President Franklin M. Drilon expressed concern about the country’s ability to meet its target economic growth this year, which he said is being dragged down by what continues to be an “alarming” trend of government underspending.

The Senate leader’s statement came after the Philippine Statistics Authority (PSA) and the National Economic and Development Authority (NEDA) on Thursday reported the country’s gross domestic product (GDP) for the second quarter of 2015 at 5.6%, which is way below the 6.4% it registered in the same period last year.

Drilon asked the country’s economic managers if the target GDP of 7% to 8% is still within reach, “when our present economic performance indicates otherwise?”

While he wishes to be as optimistic as the country’s economic managers, Drilon said that it is becoming more apparent now that the full year target of 7%-8% GDP is a “pipe dream.”

“The higher GDP target is ideal, but at the rate things are going it would be unattainable. It would mean the economy has to grow by at least 8.7% in the remaining quarters in order to achieve the minimum growth rate target of 7%, which is impossible to achieve,” said Drilon.

He noted that even Socioeconomic Planning Secretary and NEDA Director-General Arsenio M. Balisacan had earlier said that “the higher end of the 2015 goal would be difficult to achieve.”

“I am therefore asking our Cabinet members who lead the government’s economic cluster to conduct a serious re-assessment of our current standing, including a realistic description of what the country could and could not achieve for this year. Only then can we move forward and come up with the necessary solution,” Drilon said.

He pointed to government underspending as one of the key areas which require “immediate action,” citing that government spending represents nearly 20% of the Philippine’s annual GDP.

“The 3.9% increase in government consumption in this quarter is a welcome development, but it is obvious much more needs to be done in terms of fixing issues on spending such as bureaucratic bottlenecks, especially in the public infrastructure sector,” Drilon said. (PNA) CTB/PR/EBP